In addition to its Atlanta office, Franklin Street has operations in Tampa, Fort Lauderdale, Jacksonville, Miami and Orlando.

Globest.com: What are the challenges of insuring a cannabis business while marijuana remains illegal under federal law?

 Shadeed: Regulatory driven claims are the main driver of directors' and officers' liability insurance (D&O) coverage, which is becoming more prevalent with companies becoming public, and raising large amounts of Series A and B funds in the private equity space. D&O is driven by sides A, B, and C coverage, and the option for public companies to provide regulatory coverage or not. Regulatory coverage is imperative, as all suits will be based upon federal statutes and will most likely be class action based upon product liability and potential product recall situations.  As trial lawyers begin to set case precedent in this space, coverage for professional exposures will evolve.

Globest.com: How would federal legalization of marijuana impact the cannabis business insurance market?

Shadeed: Product liability and product recall are vital coverage to protect balance sheets, and again will be driven by class action suits and federal regulatory statutes. Having federal approval for cannabis in the U.S. will dramatically lower this risk, but until that time it is incredibly difficult to provide any actuarial backing to these pricing options, as the marketplace is now being created. It takes creativity in structure to place this coverage, and trust with an insured and underwriter.

How is the insurance market expanding in the cannabis and hemp industry?

 Shadeed: The market is evolving daily, and as carriers can comprehend the risk and expand their appetites, options increase in the market. Having an A- rated carrier or better is extremely important, as you want your premium dollars to deliver claim payouts in the event. Many of the current programs, and even Lloyd's of London, have pulled coverage from states or insureds due to insurability issues and adjusting stances on cannabis risk.

Globest.com: Are there new laws or regulations under consideration that could increase cannabis insurance options?

 Shadeed: Yes, the legality in different states evolves what coverages are needed, and available. Also, the difficulty in finding carriers with the correct risk appetite is still a risk, for example, if an underwriting manager wants to pull out of the space, you have 30 days to find new coverage. That is a lot of wasted time in replacing coverage, instead of growing your business.

Globest.com: What other factors should cannabusiness owners be aware of when considering an insurance carrier?

 Shadeed: Here's the key question you should ask yourself before choosing an insurance company: “Are you certain the carrier will provide you with great service when you need a claim paid?” If you have a shadow of a doubt about their reliability, then choose another insurance carrier for your medical marijuana business.